FedUpUSA

Archive for January 20th, 2010

Jobless claims surge in the latest week

By Greg Robb

WASHINGTON (MarketWatch) – First-time claims for state unemployment benefits jumped unexpectedly by the largest amount in eight months, the Labor Department reported Thursday. The number of initial claims in the week ending Jan. 16 rose 36,000 to 482,000. The consensus forecast of Wall Street economists was for claims to inch lower to 438,000. This is the highest level of claims since November. The four-week average rose 7,000 to 448,250. This is the first increase after 19 straight declines. Claims in the previous week were revised to an increase of 13,000 to 446,000 compared with the initial estimate of an increase of 11,000 to 444,000. A Labor Department official said that there were more estimates this week because of the holiday on Monday. In addition, some of the increase may be due to administrative delays in reporting claims since the Christmas and New Year holidays. Overall, a record 12 million Americans received federal and state unemployment benefits on an unadjusted basis in the week ended Jan. 2, the latest period for which the data is available. This is up from 10.9 million in the prior week.

Ring, Ring: CITIZENS CALLING! (Bank Limits)

Posted by Karl Denninger

So President Obama is going to put forward some sort of proposal to limit bank risk tomorrow eh?

Mr. Obama’s proposal is expected to include new scale restrictions on the size of the country’s largest financial institutions. The goal would be to deter banks from becoming so large they put the broader economy at risk and to also prevent banks from becoming so large they distort normal competitive forces. It couldn’t be learned what precise limits the White House will endorse, or whether Mr. Obama will spell out the exact limits on Thursday.

Mr. Obama is also expected to endorse, for the first time publicly, measures pushed by former Federal Reserve Chairman Paul Volcker, which would place restrictions on the proprietary trading done by commercial banks, essentially limiting the way banks bet with their own capital. Administration officials say they want to place “firewalls” between different divisions of financial companies to ensure banks don’t indirectly subsidize “speculative” trading through other subsidiaries that hold federally insured deposits.

Firewalls eh?  Oh, you mean like the “chinese walls” that were supposed to prevent things like banks shorting things they’re securitizing and selling to customers?

If the proposal took effect it would reshape Wall Street. Big banks would be forced to break off their investing banking units—which trade and underwrite securities and make their own bets on markets—from traditional businesses, which make loans and take deposits.

Oh, you mean that banks would not be able to use their access to sovereign credit to speculate and then shove off their losses on the taxpayer?

How about the massive fraud – you know, claiming that securities are “money good” when they’re really used dog food?

I’m sorry, but a year into this, and having watched Paul Volcker be ignored for that entire year, I’m not impressed by words any more.

I might be impressed by action, and as soon as there’s an actual concrete proposal I’ll write again on it.

But for now, I will simply note that the President Obama promised not to play banker stooge during the campaign, but in fact voted for TARP (the primary act of banking stoogery), had Timmy Geithner put an unlimited guarantee on Fannie and Freddie, and has done exactly nothing about investigating and prosecuting the massive and pervasive fraud that underlay the entirety of the housing bubble.

I will also point out that a big part of the Massachusetts loss of the former Kennedy Senate Seat was due to “Bailout Nation” – where the citizens got screwed every time and the banksters make off with billions in bonuses.

We the people are done being nice about this, and unless we see action – not words – YOU’RE FIRED will be the mantra that rings out in November.

And no, you don’t have until then to show us you mean what you say.

We expect to see results – and actions - NOW – if those in the House and Senate would like to keep their jobs.

STOP THE LOOTING AND START PROSECUTING!

Senate Democrats Propose $1.9 Trillion Increase in Federal Debt Limit

WASHINGTON — Senate Democrats have proposed permitting the federal government to borrow an additional $1.9 trillion to pay its bills. That would permit the national debt to reach $14.3 trillion.

The unpopular legislation is needed to allow the federal government to issue bonds to fund programs and prevent a first-time default on obligations.

The record increase in the so-called debt limit is required because the budget deficit has spiraled out of control in the wake of a recession that cut tax revenues, the Wall Street bailout, and increased spending by the Democratic-controlled Congress.

Congress has never failed to increase the borrowing limit, but it will take 60 votes to pass the legislation under an agreement by top Senate leaders.